Archives: 05/2011

After bin Laden

As Chris Preble noted early Monday morning, Osama bin Laden is dead. In addition to celebrating V-OBL Day, we should take a moment to reflect on wars of the last decade and the civil liberties we have sacrificed since September 11, 2001. Malou Innocent makes the case for reconsidering our foreign policy, and Jim Harper asks if he can have his airport back. We lay out these thoughts in more detail in this Cato video, After bin Laden.

The phrase “after bin Laden” has a nice ring to it. Cato held counterterrorism conferences in 2009 and 2010, and there’s more Cato work on counterterrorism and homeland security here.

U.S. Sugar Program Means Higher Prices and Short Supplies

Advocates of the U.S. sugar program like to claim they are protecting our “food security.” It turns out that trade barriers deliver higher prices for consumers while making our food supplies LESS secure.

According to a story in yesterday’s Wall Street Journal, titled “Sugar Squeeze in U.S.,” bad weather has curbed the amount of sugar cane produced in Florida and sugar beets in the Midwest. When combined with restrictive import quotas that virtually guarantee U.S. producers 85 percent of the domestic market, domestic sugar prices could soon spike upward.

Americans currently pay more than 36 cents for a pound of sugar, more than 50 percent above the world price. The sugar program not only imposes extra costs on American consumers but also hurts U.S. small businesses and industries that use sugar in their final products, such as bakeries, family restaurants, cereal companies, and confectioners.

Rising prices and constricted domestic supplies have prompted a bipartisan coalition of lawmakers in Congress to introduce legislation to dismantle the anti-competitive sugar program and to restore the freedom of Americans to buy sugar at global prices. A bill has been sponsored in the Senate by Richard Lugar, R-Ind., titled “The Free Sugar Act of 2011.” A companion bill has been sponsored in the House by freshman Republican Bob Dold, whose suburban Chicago district has seen its candy industry decimated by high domestic sugar costs; and Democrat Earl Blumenauer, a long-time critic of U.S. farm programs and other trade barriers that disproportionately hurt poor families, such as our scandalously high tariffs on imported shoes.

In a Dear Colleague letter distributed last week, Dold and Blumenauer wrote,

According to a Commerce Department study, for every job protected by our antiquated sugar program, three American manufacturing jobs are lost. By eliminating U.S. sugar price controls and quotas, Congress can reverse this wasteful policy. With accelerating U.S. manufacturing job losses over the past few decades, Congress should no longer maintain an old and inefficient policy that destroys good-paying American jobs.

Here is a Cato op-ed and a Cato Capitol Hill Briefing, both from October 2009, on why the sugar program needs to be abolished.

Cato Unbound: The Politics of Family Size

In the 1970s, economists and demographers worried about the “population bomb” — world population was exploding, and many doubted there would be resources enough for everyone. At least two schools of thought emerged. One held that population needed to be curbed through public policy — perhaps coercively. The other school, always a minority view, held that human beings themselves were “the ultimate resource” — a phrase coined by economist Julian Simon. On this view, more people would mean more productivity and more creative minds brought to the task of providing for the species.

Since then, conditions have changed dramatically and in ways no one predicted. World population growth slowed at a pace far beyond what anyone thought possible, even in countries that didn’t adopt anti-natalist policies. Several countries are now below replacement fertility rates, and even the fastest-growing populations are slowing down.

Those who worried about the population bomb may worry a little bit less, but fans of Julian Simon shouldn’t be so pleased. This month’s Cato Unbound lead essay by Bryan Caplan examines the problem of world population with a framework strongly inspired by the late Professor Simon. Caplan recommends several policy initiatives that will encourage the growth at least of the American population while protecting individual rights and respecting individual choices.

Caplan’s views here, as elsewhere in his work, are iconoclastic. We’ve invited a distinguished panel to discuss them over the course of the month: Economist Betsey Stevenson of the Wharton School, Columbia University historian Matthew Connelly, and historical economist Gregory Clark of UC Davis. Each will address Caplan’s argument using a range of methodological tools and with somewhat different political values.

Do be sure to check back often, or subscribe to Cato Unbound via RSS.

Ron Paul on Diane Rehm

Last week all the guests on NPR’s Diane Rehm Show said Ron Paul was bad, very bad, to question the legitimacy of the Federal Reserve Board. (Very near the end of the show.) Diane responded by saying that Paul would be interviewed on the show the following week, but the show’s website didn’t confirm that. Now it does.

Tomorrow, Tuesday, at 10 a.m. ET, Ron Paul discusses his new book Liberty Defined on the Diane Rehm Show. Expect tough questions and lots of callers.

If taxes and inflation make it impossible for you to afford Paul’s new book, you can always read his book The Case for Gold for free online.

Can I Have My Airport Back Please?

Even while it was a rumor that President Obama would announce that Osama bin Laden had been killed, Americans began to digest the ramifications, asking, for example, “can I have my airport back please?”

Pleasing though it is to have in contemplation, the question is premature. Students of terrorism, such as those who attended our 2009 and 2010 counterterrorism conferences, know that the killing of bin Laden will have little direct effect on the network he spawned. Its indirect, discouraging effect on terrorism is something I mused about in an earlier post.

What about the effects on the rest of us, the people and actors in our great counterterrorism policymaking apparatus?

Osama bin Laden’s survival helped shore up the mystique of the terrorist supervillain, which has fed counterterrorism excess such as the Transportation Security Administration’s domestic airport security gauntlet. Now that bin Laden is gone, the public will be more willing to carefully balance security and privacy in our free country. By a small, but important margin, courts will be less willing to indulge extravagant government claims about threat and risk.

My friends in the national security bureaucracy may honestly perceive the contraction in their power as carelessness about a threat that they have dedicated their professional lives to combating, but the Declaration of Independence touts security only once, and freedom twice, in the phrase “life, liberty, and the pursuit of happiness.” The counterterrorism debate continues.

Monday Links

Saving Hayek from His Friends

George Soros is to be commended for coming to the Cato Institute on Thursday for a civil and scholarly panel discussion. Soros appeared on an illustrious panel—including Richard Epstein, Ronald Hamowy, and Bruce Caldwell—discussing the impact and influence of F. A. Hayek’s The Constitution of Liberty, which the University of Chicago Press has recently published in a wonderful definitive edition. (You can watch the event here.) Soros’s appeal for more dialogue and understanding between two political persuasions—very roughly speaking “pro-market” and “pro-regulation”—was underscored by his willingness to come to Cato. I thank him for doing so.

So I want to continue the conversation he began Thursday—to open up lines of communication and articulate differences and points of contention. The focal point should be on Hayek, his ideas and his reputation.

Hayek was a complex and challenging thinker who deserves to be taken seriously by all who are interested in political philosophy. His most profound ideas are immense abstractions that can produce as much confusion as they do insight. Moreover, like all highly abstract ideas, Hayek’s insights are difficult to transform into concrete action and policy. In other words, there is a lot of disagreement over “what would Hayek do?”

But, at the very least, Hayek deserves more than simply calling him an “apostle of market fundamentalism,” as Soros did both at Cato and in his excerpted remarks in Politico. I think this characterization is fundamentally mistaken. Moreover, characterizing Hayek as a market fundamentalist only builds up the wall of miscommunication that Soros has criticized.

Calling Hayek a fundamentalist has become the preferred method of ignoring him. Whatever the term “market fundamentalist” actually means definitionally, its main purpose is to paint opponents as unthinking dogmatists. At best, Hayek was a “market presumptionist” who presumed that markets were the best choice absent compelling evidence that regulation or intervention was needed. He believed in a broad array of social welfare programs while being extremely skeptical about the effectiveness of centralized planning. He thought this not because he saw government as an immoral monstrosity, but because he believed that effective government action required effective knowledge and that knowledge “is not given to anyone in its totality.”

But some advocates of free markets would not even call Hayek a “market presumptionist.” Murray Rothbard, one of the most vehement supporters of free markets, resoundingly condemned The Constitution of Liberty in a memo:  “F.A. Hayek’s Constitution of Liberty is, surprisingly and distressingly, an extremely bad, and, I would even say, evil book.” In a subsequent piece, Rothbard spent many pages listing, in bullet points, all the market interventions and government programs that Hayek advocated, including a minimal welfare state and social security. For Rothbard, this list said it all: Hayek was no friend of markets.

But Rothbard, like Soros, was wrong. Hayek was a great friend to markets and a supporter of government intervention. In this way, Hayek was like most modern political thinkers of a liberal (in the classic sense) democratic bent: a little bit of government with a little bit of markets, a dash of welfare programs for taste.

So why is Hayek so marginalized in modern political thought? Well, Hayek was leery of government regulation in a way that others, for example John Rawls, were not. By offering a systematic explanation for why “rule by experts” would likely fail, Hayek pretty much guaranteed that the would-be experts—professors, economists, other intellectuals—would condemn him. As Professor Russ Roberts and John Papola put it in the latest edition of the brilliant Keynes vs. Hayek rap battles: “The economy is not a class you can master in college, to think otherwise is the pretense of knowledge.”

Nevertheless, despite his relative academic marginalization, Hayek largely won the debate that most concerned him: the debate over large-scale central planning. After the war, particularly in Britain, large-scale planning was en vogue. Businesses and individuals were shuffled about the economic stage like pieces on a chess board. Quotas were given, prices were set, work weeks were limited, the minutiae of business were given over to government regulation. Even in pre-war America, the economic policies that were enacted as part of the New Deal, such as the National Industrial Recovery Act, would shock many modern observers as hubristic over-meddling by government.

Partially thanks to Hayek, our current debates are usually over less draconian government interference. Hayek deserves a place in this modern debate as a proponent of a subtle and nuanced position, not as a religious adherent to market purity that Soros describes. Understanding Hayek’s actual ideas can help us better communicate on these issues and follow Soros’s lead in reaching across to the other side. Let debates over Hayek and his ideas continue. Even (especially?) in rap form.